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Reformed AMP wins S&P points

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International credit rating agencies have recognised concrete signs that AMP is mending its ways and improving its capital position, raising hopes of a better future for the battered fund.

Following this week's income securities buyback, Standard & Poor's revised the rating outlook on AMP from "negative" to "stable". The agency cited the removal of uncertainties and the stabilisation of AMP's businesses since its demerger in December from its troubled British arm.

The buyback of most of the debt instruments for $975 million has enabled AMP to reduce its debt to $2.2 billion.

The Australian businesses were saddled with a heavy burden in order to get regulatory approval for the demerger. AMP closed 12¢ lower at $5.62.

Moody's Investors Service said it would "view positively" any further debt reduction.

The debt reduction and signs that AMP is generating spare capital has fuelled hopes that the company will be able to conduct a share buyback at an earlier point than many have hoped.